Stock Analysis

Earnings growth of 4,076% over 1 year hasn't been enough to translate into positive returns for Hayward Holdings (NYSE:HAYW) shareholders

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NYSE:HAYW
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Investing in stocks comes with the risk that the share price will fall. Anyone who held Hayward Holdings, Inc. (NYSE:HAYW) over the last year knows what a loser feels like. In that relatively short period, the share price has plunged 50%. Hayward Holdings may have better days ahead, of course; we've only looked at a one year period. Furthermore, it's down 35% in about a quarter. That's not much fun for holders.

With the stock having lost 4.9% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Before we look at the performance, you might like to know that our analysis indicates that HAYW is potentially undervalued!

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Hayward Holdings stole the show with its EPS rocketing, in the last year. We don't think the growth guide to the sustainable growth rate in this case, but we do think this sort of increase is impressive. As you can imagine, the share price action therefore perturbs us. Some different data might shed some more light on the situation.

Hayward Holdings' revenue is actually up 28% over the last year. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

earnings-and-revenue-growth
NYSE:HAYW Earnings and Revenue Growth September 1st 2022

Hayward Holdings is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So it makes a lot of sense to check out what analysts think Hayward Holdings will earn in the future (free analyst consensus estimates)

A Different Perspective

We doubt Hayward Holdings shareholders are happy with the loss of 50% over twelve months. That falls short of the market, which lost 17%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 35%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Hayward Holdings is showing 1 warning sign in our investment analysis , you should know about...

Of course Hayward Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

Valuation is complex, but we're helping make it simple.

Find out whether Hayward Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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About NYSE:HAYW

Hayward Holdings

Hayward Holdings, Inc. designs, manufactures, and markets a portfolio of pool equipment and associated automation systems in North America, Europe, and internationally.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation5
Future Growth0
Past Performance3
Financial Health2
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Undervalued with acceptable track record.